04/25/2017

WHAT MARKETERS MUST KNOW ABOUT TECH SAVVY, MOBILE, AND "ALL THINGS DIGITAL" GEN-Z IN ORDER TO ENGAGE WITH THEM

Teens’ entertainment diet is eclectic, particularly compared to other generations when they were teens. Teenage Xers didn't have social media vying for their attention; they just wanted their MTV. As teenagers, Millennials were just being introduced to the concept of DVR and media on-demand, and only the youngest portion of that generation experienced any form of social media during their teen years.

However, today's Gen Z teens have more media choices than ever to feed their entertainment needs with the advent of streaming video services, podcasts, streaming music channels, and social video. The dominant perception is that teens are foregoing traditional media such as TV and favoring new digital options, but, in fact, Gen Z is balancing new and old. They’re adjusting their entertainment diet on the fly to make room for all they want to consume—and they aren’t remotely as concerned about format as networks and advertisers are.

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While Millennials have adopted many new entertainment formats and added them to their consumption patterns, Gen Zs are native users, which contributes to their greater use of them. For example, teens allot nearly 40% of their entertainment diet to social media and streaming video, compared to Millennials, who currently grant a third of their entertainment time to these formats. Conversely, Millennials are more likely to indulge in live and time-shifted TV (which they grew up with), with 22% of their entertainment time being spent with these formats, whereas Zs only spend 14% of their entertainment time with TV. That being said, if you ask a typical teenager if they watch TV, he or she will likely tell you yes, and then immediately note that their favorite “TV show” is a Netflix or Amazon original, as we have found in our qualitative research.

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Gen Zs are format- and provider-agnostic. Teens have a seemingly endless number of options for accessing entertainment—many of which offer comparable experiences and even occasionally the same content or variations of shows—and they’ll choose the one that suits the particular situation in which they find themselves. They don’t mind if their favorite show comes from a streaming service, a traditional TV channel, or even a social media network, such as Snapchat, so long as it’s entertaining and easily accessible whenever and wherever they want to watch. To that point, nearly a third of teens (31%) revealed that they aren’t sure what networks created a lot of the shows they watch.

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As a result, video entertainment providers are having an identity crisis as they try to solve for the future. While Netflix istrying to become HBO before HBO can become Netflix, teen Zs have already decided they don’t care if the entertainment they like comes from Netflix, HBO, a broadcast TV network, or a social media network. MTV is banking onreviving live programming and youth’s persistent passion for music to give kids a reason to tune in, whereas The CW is crafting its own streaming experienceto give young fans the access they want. These entertainment providers are fighting separate battles on two fronts: on one hand, they are trying to create killer content and on the other, they’re trying to increase on-demand access.

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However, few have developed robust, seamless cross-channel strategies that offer killer content and always-on access across the multiple entertainment formats that comprise young consumers’ entertainment diets. What is Netflix’s strategy to develop entertainment for Snapchat? How will MTV’s next generation of live programming coincide with teen’s penchant for watching “reruns” via streaming services?

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For marketers and advertisers that want to win young consumers, the question is how they’ll adapt to meet this latest shift in the entertainment landscape, especially as they have historically been slow to embrace such evolution. As modern entertainment networks are challenged to develop strategies and programming that reflect the new reality of teens’ fluid entertainment diet, this will reveal unique opportunities for marketers and advertisers that they must be ready to embrace, even if the territory is uncharted.

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COMMENTARY:

Gen-Z Instore Shopping

According to new research from retail analytics and omnichannel engagement firm Euclid Analytics, 53 percent of Gen Z shoppers shop in retail stores at least once a week, and the National Retail Federation indicates they hold an estimated $44 billion in buying power, creating a tremendous opportunity for retailers to attract and engage with a new set of customers. The Gen Z population, born between the late 1990s and the mid-2000s, is set to reach 2.6 billion by 2020 and is the first generation to have grown up alongside smart devices, social media networks and fast-changing consumer messaging platforms. As a result, Gen Z shoppers are increasingly motivated by the convenience and personalization found online, forcing retailers to cater to new behaviors and expectations.

The study reveals what retailers should know about the Gen Z shopper versus other generations—and how they can adapt their marketing strategies to engage with this mobile-first shopper.

Key findings include:

Gen Z values the in-store experience: 66 percent of Gen Z still prefer to shop in store because they like to see, hold and try on products before buying and 28 percent of Gen Z shoppers want to engage with store associates while shopping, the most of any generation.

Gen Z visits stores to buy, not browse: Only 47 percent of Gen Z shoppers like to browse stores (tied with Baby Boomers for the lowest compared to Millennials and Gen X) and 31 percent of Gen Z shoppers believe it is hard to find items they are looking for in a physical store (the most of any generation).

Personalization gains focus: 26 percent of Gen Z shoppers expect retailers to offer a more personalized experience based on their shopping habits and preferences, the most of all demographics, versus 22 percent of Millennials, 17 percent of Gen X and 11 percent of Baby Boomers.

Snapchat provides social proof: 44 percent of Gen Z shoppers use Snapchat the most while shopping in a retail store, while only 16 percent of Millennial and 5 percent of Gen X respondents.

Instagram wins for brand discovery: While Gen Z shoppers use Snapchat the most while shopping, they rely mainly on Instagram (45 percent) to find new cool products, followed by Facebook (40 percent).

“Retailers should reach out to Generation Z at this early stage to introduce their brands and forge enduring relationships. Our findings highlight some great opportunities for them to connect with this mobile-first population that’s still very much interested in meaningful in-store experiences. Winning their loyalty will mean getting creative about using mobile and social marketing outreach in their physical stores.”

Gen Z is an important group for advertisers, especially as they comprise a greater portion of that coveted 18 - 35 demographic. Their frustration with digital ads tells marketers across the industry that they need to step up their game. Luckily, advertisers can ensure their ads stay Gen Z-significant by leveraging three key elements in their digital advertising approach: user-generated content, cross-device reach, and relevance.

User-Generated Content:

Gen Zers want to “co-create” with their favorite brands, and there are ways in which technology lets marketers infuse their digital advertising with user-generated content. To start, Gen Zers are hyper-sensitive to manipulation and relate better to real content than manufactured content. That shouldn’t be surprising given that user-generated content drives key social platforms today, where Gen Zers spend their online time. A Facebook video of a skateboard trick or an Instagram picture of the Northern Lights resonates with this generation in a way that manufactured content can’t.

Digital ads that find a way to embrace user-generated content show an appreciation for the “co-creation” Gen Z favors. Brand appreciation is important to this generation, and they’ll quickly move on if they can’t detect it.

Cross-Device Reach:

Gen Z live their lives on multiple channels, across multiple screens and have higher “digital” expectations than any generation before them. Apart from growing up in an advanced digital world, Gen Zers are multi-taskers. They work and play on multiple screens, often at the same time. Just because a teenager’s browsing through Facebook pictures while simultaneously G-chatting a friend, doesn’t mean those actions are happening on the same device. That’s why it’s critical for marketers to have cross-device reach. Without that capability, they risk losing greater visibility. Gen Z expects everything they get on one screen to be available to them on others. Why shouldn’t they? If digital marketers want to cater to this sought-after group, they need to be present with them across every digital touchpoint.

Timeliness + Relevancy:

Growing up in a world of information overload, this generation’s attention is difficult to grab. That’s why all advertising must be highly relevant and personalized. It’s true that earlier generations have found targeted advertising around things that interested and resonated with them to be invasive, even creepy. That is not the case with Gen Z. They expect this approach. Their shorter attention spans are attracted to advertising that personally resonates with them. If an ad doesn’t strike that chord, they’ll immediately move on.

They’ve also grown up in the world of “instant.” Instant transportation, instant delivery, instant payments — that’s why marketers can’t underestimate the power of timeliness. Pushing creative efforts around relevant events in real time is valuable because it capitalizes on conversations that matter most and matter “now” to their audiences.

Ultimately, Gen Z’s a great indicator of what the future of consumer expectations looks like — advertising needs to become more thoughtful. That holds true for the people marketers target and the content they use. When a brand can achieve that, and reach audiences across every digital touchpoint, they will find success with Gen Z, and those who follow.